Last time I checked, having one's zone roots (zonepaths) on
ZFS file systems was not a recommended practice, despite the
fact that this works. IIRC, the problem was that the upgrade
code didn't grok zfs and would therefore get terribly confused
should the zone roots reside on ZFS.
However, given that S10 11/06 doesn't support upgrading of zones
anyway (even if they reside on UFS file systems), is this point
moot? (Or is that applicable to live upgrade only?)

This is incorrect. All S10 updates have supported upgrading systems
with zones. I believe what you are thinking of is that live-upgrade
does not support upgrading systems with zones. This is being
fixed in the next S10 update. It is already fixed in nevada.

More succinctly: apart from not being able to upgrade (presumably
an initial reinstall will be required), what are the reasons for
NOT hosting zone roots on ZFS?

That is the only real reason. The only other reason I know of
is fairly obscure. The patch tools don't know about zfs so they
can miscalculate space when you have a set of zones, each on
their own zfs dataset, but in the same zpool. If you were really
tight on space, the patch process might fail partway through as a
result. This is probably not an issue for most people but is
the only other one I know of.
Jerry
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